Monday, April 21, 2014

Is Efficiency Stiffling Innovation

Balance is the most challenging continuity regardless of the strategic emphasis

At many organizations, in pursuit of operational excellence, there is such an emphasis on efficiency rather than innovation or creativity. Companies are focusing on improving margins by reducing the bottom-line rather than increasing the top-line. The improving bottom line takes little creativity and risk, while working on the top-line takes risk and creativity, as it is not a sure thing. Does that mean efficiency killing innovation?

Efficiency and innovation just have to learn to live and function togetherAn obsession with the rigidity of efficiency stunts the innovation creation process. Innovation is fluid and should not be straight-jacketed. Efficiency may easily kill the nascent and very vulnerable child of innovation not quite ready to be analyzed for its profit margin. Many process innovations will be concerned with increasing and optimizing efficiency and maintaining existing skills and linkages. "The greater the efficiency of an organization, the greater the need is for creativity. Efficiency will extract the maximum benefit from a new idea. If an organization is inefficient, it will be inefficient with new ideas. Efficiency and creativity complement, not oppose, one another." - Edward de Bono

Balance is the most challenging continuity regardless of the strategic emphasis. The search for efficiency is also a concern for the strategic view about improvements to "Operational Effectiveness", such as new processes or workflows propagate throughout the industry, are easily replicated and will likely result in competitive convergence. Efficiency and short-term goal orientation often divert focus from innovation in general; and innovation that will benefit in the long range, but lower profitability in the short-term: How do you address this problem as you develop a strategic plan? How do you balance the short-term and long-term innovation /opportunities? It is the art of balance and continuity regardless of the emphasis.

Obsession is the killing agent. As processes yielding results, innovation and efficiency can complement and enhance each other. We have to understand that the world has become multidimensional. Innovation is definitely key in global competition, but not sustainable without a significant transformation in the organizational control thinking. A company can still create a product (empowering or sustainable) along a single dimension and drive towards commoditization, but only so many customers will be attracted to that product. When apply the systems thinking the concept, where multidimensional and the non-linear view is of the interconnectedness among the elements are taking in the account, obsession will become a limiting factor.

Perhaps innovation and innovators can flourish or flounder depending on the culture- the risks/rewards, the constraints, the opportunities. Leadership tends to focus on culture, structure and metrics when in reality they should focus on improving communication and elaborating insight. You can't change an organization without insight, the organization adapts exclusively to the insight you provide to it. The search for the key to the "sustainable innovation holy grail" requires a specific understanding of innovator motivation. It is not a one size fits all, culture heaped in control but an open blended culture heavily oriented toward autonomy with control applied sparingly. Most organizations want both innovation and the entrepreneurial spirit in concept or words but are not set up to deal with the personalities of these free thinkers via talent empowerment. People must enjoy the journey just as much as the final stage of completion, and must receive all the encouragement and support available from their peers if they are to be truly inspired to do and create innovative things. And most of all, they must always keep their minds focused on the objective and stay positive.

Both innovation and operational excellence are integral components of the digital strategy. The world of strategic planning is about to change completely. Ambidextrous organization separates the exploitation of the existing methods and technologies from the exploration of the new radical or potentially disruptive innovation. Strategic planning needs to become, continuous, dynamic, circumstantial and multidimensional. In other words, the strategy is no longer something you plan for, the strategy is something you exercise every single day to well leverage innovation by managing operational excellence.

In summary, the balance of efficiency and innovation is the most challenging continuity regardless of the emphasis. Innovate as early as possible. Get everyone on the same page. Think it through. Execute the process efficiently. Fine-tune the cycle along the trail. Orchestrate the harmony! And maintain the humor.


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